Unformatted text preview: today (the PV of the annuity), which you then will repay by making equal periodic payments (the cash flows associated with the annuity) for a fixed number of periods. – Each payment consists of interest and repayment of the principal. Example: Present Value of an Annuity (1)  Your younger sister is starting college today. Your grandparents promise to give her $1,000 at the end of each year while she goes to college (maximum four years)....
View
Full Document
 Spring '14
 the00

Click to edit the document details